Go to Window -> Preferences -> Java -> Compiler -> Compliance
and Classfiles
and set the Compiler Compliance Level to 1.4. This tells
the compiler to recognize and allow assert statements, but does
not enable them.

To enable (make active) assert statements, you must set a flag
to the compiler. Go to Run -> Run... -> Arguments, and in
the box labeled VM arguments:, enter either -enableassertions
or just -ea. Accept the changes and close the dialog.

A failure is when one of your assertions fails--that is, your program
does something wrong, and your JUnit test notices and reports the fact. An
error is when some other Exception occurs--one you haven't tested for
and didn't expect, such as a NullPointerException or an ArrayIndexOutOfBoundsException.

Why does Source->Format
really mess up my formatting?

You have unmatched brackets, braces, or parentheses, and the code reformatter
is doing the best it can. Find the syntax error (somewhere near the beginning
of the messed up formatting), fix it, and reformat.